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Vol. 149, No. 7 — April 8, 2015

Registration

SOR/2015-71 March 27, 2015

PILOTAGE ACT

Regulations Amending the Great Lakes Pilotage Tariff Regulations

P.C. 2015-342 March 26, 2015

RESOLUTION

Whereas the Great Lakes Pilotage Authority, pursuant to subsection 34(1) (see footnote a) of the Pilotage Act(see footnote b), published a copy of the proposed Regulations Amending the Great Lakes Pilotage Tariff Regulations, in the annexed form, in the Canada Gazette, Part I, on December 27, 2014;

His Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 33(1) of the Pilotage Act(see footnote d), approves the annexed Regulations Amending the Great Lakes Pilotage Tariff Regulations, made by the Great Lakes Pilotage Authority.

REGULATIONS AMENDING THE GREAT LAKES PILOTAGE TARIFF REGULATIONS

AMENDMENTS

1. (1)Section 4 of the Great Lakes Pilotage Tariff Regulations(see footnote 1) is replaced by the following:

4. A surcharge of 11% is payable until December 31, 2016 on each pilotage charge payable under section 3 for a pilotage service provided in accordance with any of Schedules 1 to 3.

(2) Section 4 of the Regulations is replaced by the following:

4. A surcharge of 10% is payable until December 31, 2017 on each pilotage charge payable under section 3 for a pilotage service provided in accordance with any of Schedules 1 to 3.

2. (1)Subsections 1(1) to (4) of Schedule 1 to the Regulations are replaced by the following:

1. (1) Subject to subsection (2), the basic charge for a passage, other than a movage, through International District No. 1 or any part of it, and its contiguous waters, is $18.01 for each kilometre ($29.97 for each statute mile), plus $400 for each lock transited.

(2) The minimum and maximum basic charges for a through trip through International District No. 1 and its contiguous waters are $875 and $3,843, respectively.

(3) The basic charge for a movage in International District No. 1 and its contiguous waters is $1,320.

(4) If a ship, during its passage through the Welland Canal, docks or undocks for any reason other than instructions given by The St. Lawrence Seaway Management Corporation, the basic charge is $56 for each kilometre ($91.91 for each statute mile), plus $342 for each lock transited, with a minimum charge of $1,143.

(2) Subsections 1(1) to (4) of Schedule 1 to the Regulations are replaced by the following:

1. (1) Subject to subsection (2), the basic charge for a passage, other than a movage, through International District No. 1 or any part of it, and its contiguous waters, is $18.28 for each kilometre ($30.42 for each statute mile), plus $406 for each lock transited.

(2) The minimum and maximum basic charges for a through trip through International District No. 1 and its contiguous waters are $888 and $3,901, respectively.

(3) The basic charge for a movage in International District No. 1 and its contiguous waters is $1,340.

(4) If a ship, during its passage through the Welland Canal, docks or undocks for any reason other than instructions given by The St. Lawrence Seaway Management Corporation, the basic charge is $57 for each kilometre ($93.29 for each statute mile), plus $347 for each lock transited, with a minimum charge of $1,160.

(3) Subsections 1(1) to (4) of Schedule 1 to the Regulations are replaced by the following:

1. (1) Subject to subsection (2), the basic charge for a passage, other than a movage, through International District No. 1 or any part of it, and its contiguous waters, is $18.65 for each kilometre ($31.03 for each statute mile), plus $414 for each lock transited.

(2) The minimum and maximum basic charges for a through trip through International District No. 1 and its contiguous waters are $906 and $3,979, respectively.

(3) The basic charge for a movage in International District No. 1 and its contiguous waters is $1,367.

(4) If a ship, during its passage through the Welland Canal, docks or undocks for any reason other than instructions given by The St. Lawrence Seaway Management Corporation, the basic charge is $58 for each kilometre ($95.16 for each statute mile), plus $354 for each lock transited, with a minimum charge of $1,183.

(4) The portion of items 1 to 15 of the table to subsection 1(5) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

(a)

(b)

2,108

2,108

2.

2,253

3.

1,330

4.

3,919

5.

2,253

6.

1,631

7.

4,543

8.

2,925

9.

2,253

10.

1,330

11.

2,949

12.

2,949

13.

2,289

14.

1,330

15.

1,631

(5) The portion of items 1 to 15 of the table to subsection 1(5) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

(a)

(b)

2,140

2,140

2.

2,287

3.

1,350

4.

3,978

5.

2,287

6.

1,655

7.

4,611

8.

2,969

9.

2,287

10.

1,350

11.

2,993

12.

2,993

13.

2,323

14.

1,350

15.

1,655

(6) The portion of items 1 to 15 of the table to subsection 1(5) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

(a)

(b)

2,183

2,183

2.

2,333

3.

1,377

4.

4,058

5.

2,333

6.

1,688

7.

4,703

8.

3,028

9.

2,333

10.

1,377

11.

3,053

12.

3,053

13.

2,369

14.

1,377

15.

1,688

(7) The portion of items 1 to 4 of the table to subsection 1(6) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

2,980

2.

2,496

3.

1,122

4.

1,122

(8) The portion of items 1 to 4 of the table to subsection 1(6) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

3,025

2.

2,533

3.

1,139

4.

1,139

(9) The portion of items 1 to 4 of the table to subsection 1(6) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

3,086

2.

2,584

3.

1,162

4.

1,162

(10) Section 1 of Schedule 1 to the Regulations is amended by adding the following after subsection (6):

(7) An additional charge of $250 is payable for each embarkation or disembarkation of a Canadian pilot at the Detroit pilot boat.

3. (1)The portion of items 1 and 2 of the table to subsection 2(1) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

(a)

(b)

(c)

986

867

599

2.

(a)

(b)

(c)

939

668

573

(2) The portion of items 1 and 2 of the table to subsection 2(1) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

(a)

(b)

(c)

1,001

880

608

2.

(a)

(b)

(c)

953

678

582

(3) The portion of items 1 and 2 of the table to subsection 2(1) of Schedule 1 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

(a)

(b)

(c)

1,021

898

620

2.

(a)

(b)

(c)

972

692

594

(4) Subsection 2(3) of Schedule 1 to the Regulations is replaced by the following:

(3) The basic charge for pilotage services consisting of a lockage and a movage between Buffalo and any point on the Niagara River below the Black Rock Lock is $1,704.

(5) Subsection 2(3) of Schedule 1 to the Regulations is replaced by the following:

(3) The basic charge for pilotage services consisting of a lockage and a movage between Buffalo and any point on the Niagara River below the Black Rock Lock is $1,730.

(6) Subsection 2(3) of Schedule 1 to the Regulations is replaced by the following:

(3) The basic charge for pilotage services consisting of a lockage and a movage between Buffalo and any point on the Niagara River below the Black Rock Lock is $1,765.

4. (1)Subsections 3(1) and (2) of Schedule 1 to the Regulations are replaced by the following:

3. (1) Subject to subsections (2) and (3), if a pilot is detained for the convenience of a ship after the end of the pilot’s assignment or during an interruption of the passage of the ship through designated waters or contiguous waters, an additional basic charge of $79 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,896.

(2) Subsections 3(1) and (2) of Schedule 1 to the Regulations are replaced by the following:

3. (1) Subject to subsections (2) and (3), if a pilot is detained for the convenience of a ship after the end of the pilot’s assignment or during an interruption of the passage of the ship through designated waters or contiguous waters, an additional basic charge of $80 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,920.

(3) Subsections 3(1) and (2) of Schedule 1 to the Regulations are replaced by the following:

3. (1) Subject to subsections (2) and (3), if a pilot is detained for the convenience of a ship after the end of the pilot’s assignment or during an interruption of the passage of the ship through designated waters or contiguous waters, an additional basic charge of $82 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,968.

5. (1)Section 4 of Schedule 1 to the Regulations is replaced by the following:

4. (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $79 is payable for each hour or part of an hour of that delay, including the first hour.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,896.

(2) Section 4 of Schedule 1 to the Regulations is replaced by the following:

4. (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $80 is payable for each hour or part of an hour of that delay, including the first hour.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,920.

(3) Section 4 of Schedule 1 to the Regulations is replaced by the following:

4. (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $82 is payable for each hour or part of an hour of that delay, including the first hour.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $1,968.

6. (1)Subsections 5(1) to (3) of Schedule 1 to the Regulations are replaced by the following:

5. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,648 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $79 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $1,896.

(2) Subsections 5(1) to (3) of Schedule 1 to the Regulations are replaced by the following:

5. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,673 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $80 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $1,920.

(3) Subsections 5(1) to (3) of Schedule 1 to the Regulations are replaced by the following:

5. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,706 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $82 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $1,968.

7. (1)Subsections 8(1) and (2) of Schedule 1 to the Regulations are replaced by the following:

8. (1) If a pilot is unable to board a ship at the normal boarding point and must, in order to board it, travel beyond the area for which the pilot’s services are requested, a basic charge of $474 is payable for each 24-hour period or part of a 24-hour period during which the pilot is away from the normal boarding point.

(2) If a pilot is carried on a ship beyond the area for which the pilot’s services are requested, a basic charge of $474 is payable for each 24-hour period or part of a 24-hour period before the pilot’s return to the place where the pilot normally would have disembarked.

(2) Subsections 8(1) and (2) of Schedule 1 to the Regulations are replaced by the following:

8. (1) If a pilot is unable to board a ship at the normal boarding point and must, in order to board it, travel beyond the area for which the pilot’s services are requested, a basic charge of $481 is payable for each 24-hour period or part of a 24-hour period during which the pilot is away from the normal boarding point.

(2) If a pilot is carried on a ship beyond the area for which the pilot’s services are requested, a basic charge of $481 is payable for each 24-hour period or part of a 24-hour period before the pilot’s return to the place where the pilot normally would have disembarked.

(3) Subsections 8(1) and (2) of Schedule 1 to the Regulations are replaced by the following:

8. (1) If a pilot is unable to board a ship at the normal boarding point and must, in order to board it, travel beyond the area for which the pilot’s services are requested, a basic charge of $491 is payable for each 24-hour period or part of a 24-hour period during which the pilot is away from the normal boarding point.

(2) If a pilot is carried on a ship beyond the area for which the pilot’s services are requested, a basic charge of $491 is payable for each 24-hour period or part of a 24-hour period before the pilot’s return to the place where the pilot normally would have disembarked.

8. (1)The portion of items 1 to 4 of the table to section 1 of Schedule 2 to the Regulations in columns 2 and 3 is replaced by the following:

Item

Column 2

Basic Charge ($)

Column 3

Minimum Basic Charge ($)

1.

4,510

N/A

2.

20.71 for each kilometre (34.46 for each statute mile), plus 576 for each lock transited

1,160

3.

808

N/A

4.

1,737

N/A

(2) The portion of items 1 to 4 of the table to section 1 of Schedule 2 to the Regulations in columns 2 and 3 is replaced by the following:

Item

Column 2

Basic Charge ($)

Column 3

Minimum Basic Charge ($)

1.

4,578

N/A

2.

21.02 for each kilometre (34.98 for each statute mile), plus 585 for each lock transited

1,177

3.

820

N/A

4.

1,763

N/A

(3) The portion of items 1 to 4 of the table to section 1 of Schedule 2 to the Regulations in columns 2 and 3 is replaced by the following:

Item

Column 2

Basic Charge ($)

Column 3

Minimum Basic Charge ($)

1.

4,670

N/A

2.

21.44 for each kilometre (35.68 for each statute mile), plus 597 for each lock transited

1,201

3.

836

N/A

4.

1,798

N/A

9. (1)Subsections 2(1) and (2) of Schedule 2 to the Regulations are replaced by the following:

2. (1) Subject to subsections (2) and (3), if a pilot is detained for the convenience of a ship after the end of the pilot’s assignment or during an interruption of the passage of the ship through the Cornwall District, an additional basic charge of $151 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $3,624.

(2) Subsections 2(1) and (2) of Schedule 2 to the Regulations are replaced by the following:

2. (1) Subject to subsections (2) and (3), if a pilot is detained for the convenience of a ship after the end of the pilot’s assignment or during an interruption of the passage of the ship through the Cornwall District, an additional basic charge of $153 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $3,672.

(3) Subsections 2(1) and (2) of Schedule 2 to the Regulations are replaced by the following:

2. (1) Subject to subsections (2) and (3), if a pilot is detained for the convenience of a ship after the end of the pilot’s assignment or during an interruption of the passage of the ship through the Cornwall District, an additional basic charge of $156 is payable for each hour or part of an hour that the pilot is detained.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $3,744.

10. (1)Section 3 of Schedule 2 to the Regulations is replaced by the following:

3. (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $151 is payable for each hour or part of an hour of that delay, including the first hour.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $3,624.

(2) Section 3 of Schedule 2 to the Regulations is replaced by the following:

3. (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $153 is payable for each hour or part of an hour of that delay, including the first hour.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $3,672.

(3) Section 3 of Schedule 2 to the Regulations is replaced by the following:

3. (1) Subject to subsection (2), if the departure or movage of a ship to which a pilot has been assigned is delayed for the convenience of the ship for more than one hour after the pilot reports for duty at the designated boarding point, a basic charge of $156 is payable for each hour or part of an hour of that delay, including the first hour.

(2) The maximum basic charge payable under subsection (1) for any 24-hour period is $3,744.

11. (1)Subsections 4(1) to (3) of Schedule 2 to the Regulations are replaced by the following:

4. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,719 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $151 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of the cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $3,624.

(2) Subsections 4(1) to (3) of Schedule 2 to the Regulations are replaced by the following:

4. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,745 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $153 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of the cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $3,672.

(3) Subsections 4(1) to (3) of Schedule 2 to the Regulations are replaced by the following:

4. (1) If a request for pilotage services is cancelled after the pilot reports for duty at the designated boarding point, a basic charge of $1,780 is payable.

(2) Subject to subsection (3), if a request for pilotage services is cancelled more than one hour after the pilot reports for duty at the designated boarding point, in addition to the basic charge set out in subsection (1), a basic charge of $156 is payable for each hour or part of an hour, including the first hour, between the time that the pilot reports for duty and the time of the cancellation.

(3) The maximum basic charge payable under subsection (2) for any 24-hour period is $3,744.

12. (1)The portion of items 1 and 2 of the table to section 1 of Schedule 3 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

1,568

2.

1,095

(2) The portion of items 1 and 2 of the table to section 1 of Schedule 3 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

1,592

2.

1,111

(3) The portion of items 1 and 2 of the table to section 1 of Schedule 3 to the Regulations in column 2 is replaced by the following:

Item

Column 2

Basic Charge ($)

1.

1,624

2.

1,133

COMING INTO FORCE

13. (1)Subject to subsections (2) and (3), these Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

In its 2008 Special Examination Report, the Auditor General required the Great Lakes Pilotage Authority (the Authority) to take measures to eliminate its accumulated deficit and to be financially self-sufficient. The Authority has been successfully taking measures to control its costs and to increase revenues as means of reducing its 2009 accumulated deficit of $5.5 million to $1.7 million at the end of 2013. The Authority is forecasting that it will further reduce its accumulated deficit to $0.5 million by the end of fiscal year 2014. However, further annual tariff amendments are required for the Authority to fully eliminate the deficit by the end of fiscal year 2015 and be financially self-sufficient for the subsequent years.

In addition, the Authority has a Memorandum of Arrangements with the United States’ Lakes Pilots Association (LPA) according to which the LPA operates pilot boat services at the change point in the Detroit River and in the Detroit Harbour. Due to the fact that the current pilot boat is 60 years old, and given the safety concerns expressed by all stakeholders, a new pilot boat must be purchased. The LPA has estimated the cost to be approximately US$1.7 million. Although the Authority does not own this vessel, the Memorandum of Arrangements does stipulate that the Authority will be charged for each trip by a Canadian pilot. The current tariffs only cover ongoing pilot boat operating costs, as per the Memorandum of Arrangements. Thus, a new pilot boat charge specific for each assignment in the Detroit/Port Huron region is required to cover these incremental fees of the new pilot boat until the financing costs have been completely paid in full. After such time, this pilot boat charge will then be rescinded.

Background

The Authority, a Crown corporation listed in Part I of Schedule III to the Financial Administration Act, was established in 1972 pursuant to the Pilotage Act (the Act). The Authority is required by subsection 33(3) of the Act to fix pilotage charges at a level that permits the Authority to operate on a self-sustaining financial basis and is fair and reasonable.

Objectives

The first objective of the amendments to the Great Lakes Pilotage Tariff Regulations (the Regulations) is to ensure that the Authority’s revenues from pilotage tariffs are sufficient to offset the anticipated increases in the 2015 to 2017 operating costs, eliminate the accumulated deficit by the end of fiscal year 2015, and generate a small surplus in 2016 and 2017 so that the Authority may be financially self-sufficient. The amendments also factor in the objective of reducing the tariff surcharge and leading to its eventual complete elimination in future years. While being financially self-sufficient is a priority, the Authority needs to continue to invest in its resources to ensure it operates, maintains and administers its pilotage services within the Great Lakes region in an efficient and safe manner.

The second objective of the amendments to the Regulations is to adjust the tariffs to include a new pilot boat charge for each pilot boat trip in the Detroit/Port Huron region as a cost recovery measure for the financing of the new pilot boat being acquired by the LPA.

Description

The Authority is increasing its general tariff for all of the pilotage charges on its pilotage assignments in all of its seven districts:

2015 — 1.5% increase

2016 — 1.5% increase

2017 — 2.0% increase

In addition, the Authority is replacing its current 12% tariff surcharges as follows:

11.0% in 2015

11.0% in 2016

10.0% in 2017

The tariff surcharge will be in effect until 2017 at which time the Authority will have discussions with its users of its pilot services about the necessity of maintaining the tariff surcharges.

These tariff amendments result in the following annual net impacts on the tariff structure, when compared to the current 2014 tariff rates: 0.5% in 2015, 1.5% for 2016 and 1.0% for 2017. These net impacts are viewed as reasonable and fair by the Authority’s customer base.

The Regulations also introduce a new pilot boat charge in the amount of $250 per trip for all assignments in the Detroit region. This incremental charge is to remain in effect until the Authority allocated shared cost is fully recovered. Once this cost is fully repaid, the Regulations will be amended to remove the charge. Based on current assignment levels, the Canadian portion of the recovery could be repaid within seven years.

“One-for-One” Rule

The “One-for-One” Rule does not apply to this amendment, as there is no change in administrative costs for business.

Small business lens

The small business lens does not apply to this amendment, as there are no costs for small business.

Consultation

The Authority’s major stakeholder is the Shipping Federation of Canada (the Federation), which represents the owners/operators of foreign-flag ships that operate within the Great Lakes system and are required to use the services of Authority pilots while transiting these waters. These foreign-flag ships represent 85% of the Authority’s business. The Authority met twice with the Federation, on May 7 and August 13, 2014, to discuss traffic, pilot numbers, service levels and tariff adjustments for the coming years.

The remaining 15% of the Authority’s business pertains to Canadian domestic fleets represented by the Canadian Shipowners Association (the Association). The Association represents approximately 70 Canadian-flag ships, most of which do not use the services of the Authority’s pilots as at least one of their crew members is a holder of a Great Lakes pilotage certificate. However, approximately 10 ships within the domestic fleet are Canadian tankers that request the services of an Authority pilot when transiting certain districts under the Authority’s jurisdiction or that have ship/cargo charterers requiring them to use the services of a pilot. In October 2014, the Authority met with two major Canadian shipowners that use these services to discuss the tariff amendment and other matters.

The Authority met with the Chamber of Marine Commerce (the Chamber) on September 26, 2014, to discuss this tariff proposal and other matters. The Chamber is the voice of the commercial marine industry in the Great Lakes. During discussions, stakeholders indicated that they would not object to the tariff adjustments.

For the new pilot boat charges in the Detroit region, the U.S. Coast Guard and the LPA met with users on July 23, 2014, and obtained consensus on the need for a new pilot boat as well as strategies to repay the financing costs with the incremental pilot boat charges.

As required under section 34 of the Pilotage Act, these amendments were prepublished in the Canada Gazette, Part I, on December 27, 2014, followed by a 30-day comment period to provide interested persons with the opportunity to make comments or to file a notice of objection with the Canadian Transportation Agency (CTA). No comments were received and no notices of objection were filed.

Rationale

The Authority determined the necessary tariff adjustments following an analysis of the forecasted financial results. These tariff rate increases allow the Authority not only to offset the forecasted operating and administrative cost increases, but also to generate reasonable levels of financial surpluses while effectively servicing the traffic projections.

The current collective agreements with the pilot groups expire on March 31, 2017. A 2.75% annual wage increase for 2015 and another 2.75% annual wage increase for 2016 are stipulated in these agreements. Pilot compensation accounts for approximately 75% of the Authority’s total cost structure.

The Authority’s overall increase in its general tariff and its tariff surcharge rates for the years 2015, 2016, and 2017 are in line with its 2015–2019 corporate plan objectives to eliminate the current accumulated deficit by the end of fiscal year 2015 and to produce and maintain a reasonable surplus at the end of the planning period.

The revenue generated from the amendments will be beneficial as it will enhance the Authority’s ability to comply with its mandate to operate on a self-sustaining financial basis. The amendments will also allow the Authority to continue to provide a safe and efficient pilotage service in accordance with the requirements of the Act.

Compared with the 2014 general tariff rates and based on traffic projections, the increases will generate additional revenues of approximately $295,000 in 2015, $290,000 in 2016 and $399,000 in 2017. The tariff surcharge rates should generate approximately $2.2 million, $2.2 million and $2.0 million for each of the three years respectively. Overall, when compared to the current 2014 tariffs, these tariff adjustments represent a slight increase of $104,000, $173,000, and $89,000, respectively, for the Authority’s customers.

To put these increases in perspective, for an average-sized ship transiting the St. Lawrence Seaway between Montréal and Thunder Bay, the cost is approximately $37,000 for a one-way trip in 2014. Should these amendments be approved, the cost will be $37,400 (a 0.5% net increase) in 2015, $37,900 (an additional 1.5% increase) in 2016 and $38,300 (an additional 1.0% increase) in 2017.

Implementation, enforcement and service standards

Section 45 of the Act provides an enforcement mechanism for these Regulations in that a pilotage authority can inform a customs officer at any port in Canada to withhold clearance from any ship for which pilotage charges are outstanding and unpaid. Section 48 of the Act stipulates that every person who fails to comply with Part 1 of the Act, other than section 15.3, or with the Regulations is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.